Financial services companies offer a variety of products and services to individual consumers that include investment and retirement products and services. The financial products and services enable individual consumers or clients to pursue their financial goals and objectives through investment and retirement accounts which can include investment in stocks, mutual finds, individual retirement accounts (IRAs), rollover IRAs, insurance certificates and annuities, among other investments choices. Financial service companies typically require an initial deposit or submission of capital from individuals or clients to enable participation in the investment or retirement product and service managed and administered by the financial services company. The financial services company manages and directs the investment of the client's capital or funds in a manner that corresponds to the type of financial product that the client has chosen to participate in. For example, the investment vehicle may be a conservative or aggressive investment vehicle, or it may be designed to invest in one company or one industry, or it may be designed to be invested in a diversified manner.
Financial services companies administering and directing such investment products and services typically require individual investor clients to submit or deposit additional funds or monetary resources so that the investment accounts or products being managed and administered by the financial client's services company are properly funded. The amount of funds required from the client can be a fixed or a varying amount, and the requirement that the client deposit funds may occur on a regular or periodic basis, e.g., monthly, semi-annually, or yearly. The need for additional client funds may also be a one-time requirement or may be on an irregular or conditional basis, e.g., when a client's account balance falls below a designated threshold amount.
Existing methods and processes for clients to submit or deposit funds into their investment accounts includes physical submission of paper instruments, e.g., personal checks, by the client for the amount of funds required and submitted during a time frame indicated by the financial services company. The financial services company can then receive the client funds from a client financial institution, e.g., a bank, upon presentment of the submitted paper instrument to the client's financial institution. A client may also provide authorization of electronic funds transfer to the appropriate client accounts in the financial services company by providing verbal authorization for such transfer. Verbal authorization can be carried out via telephone communication between the client and a designated service representative of the financial services company. The client can subsequently submit voided paper checks and other client information in order to complete the authorized transfer of client funds from a client account at a financial institution, such as a bank, to the client's account at the financial service company. Some of the methods used can be carried out by the Automated Clearing House (ACH) Network. The ACH Network is an electronic funds transfer system governed by a certain set of operating rules which provide for the interbank clearing of electronic payments for participating financial institutions. An ACH transaction generally requires an originator (such as an individual or a corporation) to initiate instructions to an originating depository financial institution. The originating financial institution then provides instructions to an ACH operator. The ACH operator (such as The American Clearing House Association or Federal Reserve) then provides the instructions to a receiving depository institution. The receiving depository institution then makes the funds available to the receiver (another individual or corporation) which in turn provides a report on its statement.
Existing methods and processes of moving client funds from the client's account at a financial institution, such as a bank, to one or more client accounts in a financial services company have drawbacks. When the process uses a live customer or service representative on the part of the financial services company, the client may be limited as to when client can initiate a call to authorize a funds transfer. For example, the client may be limited to calling a service representative during the week, Monday through Friday between 9:00 AM and 5:00 PM. This can be inconvenient if the client cannot call during the set days and times. Also, providing live person service representatives and their associated equipment for interacting with a client can be a large expense for the financial services company. The need for a client to mail additional client information such as a voided paper check will delay the actual authorization for funds transfer by the amount of time required for the mail to arrive with the client's information. This can be inconvenient if there is a pressing need to authorize the transfer funds quickly. Further, the need for a financial services company to process paper checks can be time consuming and results in increased processing costs.
There is thus a need to provide a capability for client to setup and authorize the automatic electronic transfer of client funds from a client account at one financial institution to a designated client account at another financial institution, such as a financial services provider, without the need to interact with customer or service representatives, or the need to submit voided paper instruments via a mail carrier.